4 Important Rules For Your Loyalty Program

We recently launched a new loyalty program feature in Advanced Coupons and I’ve been talking to a few early adopters about how to set up and configure the settings for their program and what rules they should put in place.

Loyalty programs are a great way to grow your WooCommerce store – or any type of store for that matter – but there are a few key config items you need to be aware of when you set up the program that will help you make it a success.

Even if you’re not using Advanced Coupons for your loyalty program (which, if you’re using WooCommerce, I think you should be!) these 4 items should be configurable regardless of what tool you’re using and can greatly affect the effectiveness of your loyalty program as a tool to grow.

  1. How many points someone earns for their spend
  2. How many points it takes to redeem one whole unit of currency (eg. $1 or €1 or whatever your currency is)
  3. What is the threshold to earn points
  4. What is the threshold to redeem points

#1 How many points someone earns for their spend

The first two settings are perhaps the most important to get correct right from the start of your loyalty program.

Perhaps the most important to your customers how many points they will earn for their spend.

Here’s the golden rule with this setting:

From the customer’s perspective you want it to look as awesome as possible.

Let me ask you, if you spent $15 with a store, what looks better?

Of course, the second one seems much more substantial as a reward and this is the exact feeling you want to elicit from your customers when you are giving them points in your loyalty program.

If you’re worried about them collecting too much points and getting too much reward, don’t worry, the next one is where we set what the “worth” of a point is.

#2 How many points it takes to redeem one whole unit of currency

As a store owner this is probably the one that you should care about the most.

This ratio that you define determines the exact “worth” of a single point.

Looking at it another way, it tells you how much discount the customer is getting for their subsequent order/s.

At this point it helps to run the numbers in a hypothetical scenario.

Say Jimmy The Customer buys some product and the order subtotal is $100. product.

If we set our #1 ratio, how many points they earn for their spend to 10 points for every dollar. That means he gets 1000 points for his order.

If we set our #2 ratio, how many points it takes to redeem $1 to 200, this means Jimmy’s 1000 points is effectively worth $5 (1000 points divided by 200 = $5 able to be redeemed).

In this scenario, the loyalty program is giving an effective discount of 5% on future orders which, for most store owners, is pretty easy to live with in exchange for incentivizing customers to make more orders.

Can you now see how this setting gives you control over the effective discount power of your customer’s points?

There’s another 2 more important settings or ways you can both incentivize your customers and also retain control over the situations where points can be earned or used.

#3 What is the threshold to earn points

Thresholds sound like limitations but actually these two settings can be used in a very positive way for your store.

The first is adding a threshold to the earning of points.

This means that in order for customers to be able to earn the points on an order, they need to first make sure the order is over a certain subtotal.

If they don’t go over the defined subtotal, they don’t get any points at all.

If they do make it past the subtotal, the reward is earning points for their whole subtotal.

The effect this has is huge.

It means your customers will actively try to get over the points threshold in order to get those precious points.

For you as the store owner it has the effect of raising your average order value.

#4 What is the threshold to redeem points

The second threshold is about how many points they need to be redeeming at a minimum in order to be able to redeem.

This means they can only redeem once they’ve stacked up that amount of points that you define.

Once they have the correct amount of points, they can redeem over the amount that you set if they wish.

The effect of this is ensuring they spend a certain amount with you before being able to claim the discount they’re owed.

Go forth and create loyalty!

I hope this has been helpful for those of you who are working through the first stages of setting up your loyalty program.

I know you’ll love having the loyalty program and your customers will be thrilled when you introduce it.

Go forth and conquer!

Leave a Reply

Your email address will not be published. Required fields are marked *